Seeking Alpha

George Acs

 
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  • That Was The Crash, Dummy [View article]
    Not really. Alpha is simply a higher level, or the excess in return. His emotional alpha may be higher than any of ours due to the manner in which he dispassionately practices his investing strategy.

    I take it on face value that it works for him and more importantly it may be a strategy that is beautifully suited to his temperament.

    Strategies tend to be situational, as you've pointed out. The time frames chosen to demonstrate a point can be the ultimate in cherry-picking to create a pre-determined outcome.

    As such, it's very difficult to define a "superior: long term strategy because the starting points for your assessment may, in fact, favor or be prejudicial against a particular strategy and the ending points may be equally biased.

    Most investors consciously or subconciously realize that to be the case. That would explain why someone with a sudden bolus of cash intuitively knows that it's ill advised to put all of the money in at one time, regardless of how good his strategy may have performed in the past. In such a case you are in effect cost averaging in terms of time passage.

    While it is nice to have retired at 46, you beat me by just a few years and I too live from investment income. However, the same may be true of David or others that have fastidiously practiced dollar cost averaging or any of its derivitive strategies.

    Of course, the ability to live off of one's investments may conveniently overlook the other part of the equation. It's not all about income, there is a component related to expenses, as well. The fact that David may have 12 children by 7 wives may make it more difficult for him to have retired by age 46, than say someone who has a pet ferret and lives in a trailer park.

    The point is, we can all get to our unique level and kind of Alpha.
    May 25 02:57 PM | 3 Likes Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    What if the "alpha" that David is seeking is actually a higher level of comfort and security?

    I think I would trade off some of my tangible returns for the intangible benefits that I value, such as peace of mind, that may be offered by any strategy. After all, the risk/reward consideration need not be entirely quantitative
    May 25 01:40 PM | 1 Like Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    Ray, having moved to a 50% cash position over the past two months when I'm typically 100% long, isn't the likely profile of a person that would believe a one day drop was the safe signal to throw caution to the wind.

    If you re-read the article you may note a line in it: "Correction? Crash? That was so yesterday. It's time to move on, dummy"

    The past few days were much ado, signifying nothing. I do believe that we will have a correction and I have been saying since the end of February that it was likely to follow the previous pattern established by the last 2 cycles, that is, an up cycle lasting 52 months. We are now in that 52nd month, so dummy or not, I am prepared through the use of greater hedging positions than I normally use.

    Dummy? Maybe, but it's better than cowering in fear for a crash that may not come again in my lifetime.
    May 25 01:18 PM | 2 Likes Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    Ben Bernanke was initially received with so much disdain, especially since it was early in his tenure that the stock market began it's downturn.

    Interestingly, he was at precisely the same length of tenure as his predecessor, Alan Greenspan, when the market plunged in 1987.

    Although there are some who place blame on the prior Federal Reserve Chairman for sowing the seeds that became the credit. mortgage and banking crises, that overlooks the tremendously decisions he had made during his tenure that kept our systems at a high state of function.

    So too, with Ben Bernanke.

    Despite so much criticism from demagogue-like politicians with unilateral approaches to every economic issue, Bernanke has taken his academic prowess and applied it to the real world problems of the world's largest economy.

    We have been very fortunate to have had a succession of Volcker, Greenspan and Bernanke, particularly after Burns and Miller
    May 25 01:09 PM | 4 Likes Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    I assumed that the latter question was quite common, but suspected that the former was not.
    May 25 12:44 PM | Likes Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    Thank you.

    Any relationship to the famous author Stephen King?
    May 25 12:19 PM | 4 Likes Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    Thanks, I take pride on my writ words, although I wish I was more well-readed
    May 25 12:17 PM | 2 Likes Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    "This comment is (censored) brilliant. "

    This comment? Or that comment?
    May 25 12:14 PM | Likes Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    Well, we can certainly agree that "We will see." That works pretty well for any kind of prediction or interpretation of how events will unfold.

    And if the Shogunate returns? Well, we'll just see how that works out, too.
    May 25 10:58 AM | 1 Like Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    After 20 years of suspended animation and a number of key metrics, including demographic shifts that are decidedly negative regarding future growth, something courageous and substantive was called for and long overdue.
    May 25 10:31 AM | 4 Likes Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    It's always great to get rid of the emotion regardless of what side it is on.

    If you sell covered calls on your positions one strategy you might consider when adding additional shares for a stock whose price has gone down is to actually not cost average but to maintain each as individual lots and be willing to sacrifice the newer, less expensive lot to assignment through the use of in the money options in order to accumulate premiums to offset paper losses on your earlier lot.

    See http://seekingalpha.co...
    May 25 09:50 AM | Likes Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    I have no idea what your reply means, although I think I've read it before elsewhere on a regular basis. I just can't quite place where.

    Still, yours may be one of my favorite comments. If only I would have recognized that sooner.
    May 25 08:12 AM | 3 Likes Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    It's like that old axiom.

    There's an obvious idiot in every meeting. If you don't see him, it's you.

    I agree, even though we all know that there must be some kind of correction ahead we can't just suspend all activities. Even plodding along is an active process and is better than completely shrinking back in fear.
    May 25 08:08 AM | 4 Likes Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    That is actually also one of the nice things about covered calls. You pick the price and just as you say, it usually works out well.
    May 25 01:44 AM | Likes Like |Link to Comment
  • That Was The Crash, Dummy [View article]
    Opportunity cost is a funny thing.

    I don't believe it's appropriate to refer to the holding of large cash positions as a liability if the prevailing thesis is that the market will be in decline.

    In fact, in such an instance, the opportunity cost of cash is an inferred asset, in that the next worst investment would have resulted in loss of principal.

    Cash is only an opportunity cost if the market goes higher. In which case the use of protective puts becomes a realized cost and spirals to become valueless.

    My most recent weekly article was entitled "Shades of 1999." In that article I suggested that despite the many who were trying to draw parallels of our current market to 1999, they were a few years off and that there is really no basis for the comparison.

    By the same token I don't believe that you can compare our current market to the Nikkei of 25 years ago, nor to the NASDAQ of 2000 that was as consequence of the 1995-1999 market.

    But more importantly, a basket of stocks that goes along for a macroeconomic ride and that is not unduly mis-balanced, will recover. The NASDAQ, particularly the issues that were at the heart of the dot com bubble and bust were hardly a balanced basket and the froth of the Nikkei from a generation ago should have given anyone but the greedy cause to pause.
    May 25 01:02 AM | Likes Like |Link to Comment
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